Does technical analysis work?

Judging by the feedback comments on this column, reader opinions are sharply divided too. The fundamental analysts who didn't see the fall in the oil price, or who told us that gold was going back to $1,500, or that the DOW would collapse didn't seem to attract as much trenchant criticism as those of us involved in technical analysis.

In 2014 we produced weekly CNBC blogs providing trading outlooks based on technical and chart analysis. We use chart analysis to establish the probability of trend change and to set price targets and objectives.

In 88 percent of analysis notes in 2014 the price targets were achieved or exceeded. That's around the same percentage of correct calls in 2013 and 2012. The analysis methods we use are not complex; they can be applied by anyone without the need for a Master's degree in finance. These methods are covered in my books, including Guppy Trading.

Charting analysis provides both the calculated price targets and the price levels that indicate the trade has failed. In 12 percent of cases, the analysis is not correct, but chart analysis provides exact price levels that signal this decision in real time.

Our best calls for 2014 included the January 2013 DOW target of 17,000, NASDAQ at 4600 and S&P at 2000. They also included oil at $88, and then later $68 and $58. The next downside support target for NYMEX oil is $48.

Gold support near $1,180 and the Shanghai Index upside targets above 3000 were also other correct analysis calls.

Our worst call was the NIFTY where we expected the parabolic trend to develop into a 50 percent or greater retracement. There was a correction, but it was not a major change in the trend. Two bullish calls on the Australian dollar were also incorrect, with the market failing to break through resistance levels.

Chart analysis is designed to identify situations where high probability outcomes are expected. Often chart analysis can be used to set exact price targets. The CNBC notes apply the same analysis methods we use in our personal trading and we use them because they work.